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volume 8 • fall 2015
Securing The Consumer
in the Digital age
ViewpoinT
Threats facing the payments ecosystem are evolving at a rapid pace because of innova- tion and interconnectivity associ- ated with the digitization of banking and retail commerce. In 2014, glo- bal investment in fintech projects tripled to reach $12.2 billion, with payments-related ventures receiving the highest share of disbursements (Accenture, 2015). While great for the delivery of new transactional possibilities, such developments have left every participant in the payments ecosystem (not just banks) vulnerable to cybercriminals. But what may be even more danger- ous than the cybercriminals is how consumers react to fraud.
Card-not-present (CNP) fraud con- tinues to pose the greatest risk. Our “2015 Consumer Payments Insight Survey,” which was conducted online among 16,500 consumers in 24 markets, shows that around 37 percent1 of payment fraud cases stem from CNP transactions, with online payment compromise (10 percent) and unexpected repeat billing (10 percent) the most widely experienced fraud types globally. Given the notable fraud migration from in-store to online post-EMV
implementation, such findings are hardly surprising. As the last major market to adopt EMV, it’s expected that the U.S. will trigger a further rise in online fraud following its October 2015 liability shift.
Mobile banking compromise is
at the other end of the spectrum, accounting for a mere 4 percent
of all payment fraud globally in 2014. However, such low fraud levels can be attributed to the relative newness of mobile tech- nology in banking and payments. With interest and investment in mobile payments rapidly gaining traction, the issue of CNP fraud certainly will begin expanding
from online to mobile. Additionally, the emerging use of wearable tech within financial services will make it the next frontier for CNP fraud.
Battling Complacency
The actions of victims immedi-
ately following the discovery of fraud have significant implications not only for the victims themselves but also for payment providers and their bottom lines. For victims, their actions (or lack thereof) put them at risk of repeat attacks, compromising the wider integrity of a payment
By Theresa Jameson, Datamonitor
In Viewpoints, prepaid and emerging payment professionals share their perspectives on the industry. Paybefore endeavors to present many points of view to offer readers new insights and information. The opinions expressed in Viewpoints are not necessarily those
of Paybefore.
1 Thefiguresforonlinepaymentcompromise,telephonepaymentcompromise,mailintercept,unexpectedrepeatbilling,and tricked by a legitimate-looking Website or effective marketing were bundled together to arrive at the CNP figure presented. There is room for this figure to be higher as CNP fraud can manifest in other ways, such as event ticket fraud and charity donation fraud, given transactions related to these activities increasingly are being conducted online using payment cards.
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